The road to ruin?

I have been predicting for some time that the crisis in social housing will get worse. Recent news and research confirms this. Last year saw the lowest number of new social homes built since records began. The right to buy and the conversion of social housing to so called affordable housing reduces the number of existing homes even further. This is happening when the need for social housing continues to grow. And some landlords in the private sector are reverting to methods that are reminiscent of Rachman in the 1960s
More worrying is evidence by the Joseph Rowntree Foundation and others that housing associations are beginning to exclude poor and marginalised people because of fears of further changes to the benefit system and the eventual introduction of Universal Credit. In some areas it is claimed that the benefit cap will mean that people in receipt of benefit will no longer be able to access social housing. Further research has shown that the number of black and minority ethnic people accessing social housing is also reducing.
Most housing associations were established in 1960s and before to provide homes for these groups. Yet in the current housing crisis housing associations appear to be moving away from their original purpose. Much has been said about the commercialisation of social housing. My greatest fear is that as we become more commercial we leave behind those people we were set up to help. Even the latest national housing campaigns mention aspiring ownership more than social housing. As poverty grows, is the social housing sector beginning to look the other way?
I spoke recently at a Labour Party Conference fringe event debate on commercialisation. Housing association speakers argued that they were meeting a need by diversifying and building “affordable” homes to rent and own. They claimed that the profits they made were invested in other schemes to make them more “affordable”. Justifying commercial ventures by claiming they had a social outcome. No one mentioned social housing at all or the people who could not afford these commercial developments. I argued that only government investment in social housing would solve the housing crisis and that commercial development was only scratching the surface and not catering for those in greatest need
I indicated the risks attached to this commercial strategy. It leads to exposure to broader housing market fluctuation. As most of these schemes are only successful because of rising markets, mainly in London. If markets change and schemes fail, as they have done in the past, it is social housing which picks up the bill.
There is also a danger of mission creep when commercialism becomes the only driver at the expense of social housing and its original purpose. Despite good intentions, commercial objectives can supersede social values. Recent research has shown that commercial development now makes up the majority of new development and that housing associations have increased their income from diversified activities including market sale and private rent by a quarter. It is here where there is a danger that original values will change as they did in some building societies like Northern Rock and The Coop Bank. And look what happened to them?
I have always understood that housing associations need to be more business-like and that there is always room for greater efficiencies and even for some commercial development. I am Chair and a board member of HACT and Valueworks which help to support this. However I fear for the future of a housing association sector, which in the pursuit of more commercial ventures, moves further away from its original purpose. If this happens who will provide a home and opportunity for poor and marginalised people in future? It is quite simple commercialism won’t solve the housing crisis. Only government investment in social housing will do this. It is time to be bold and SHOUT this out loudly.The move towards commercialism is not only financially risky, it challenges the very purpose of social housing and the future of those who live in it.


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